Bangalore: The world’s largest liquor company Diageo Plc agreed to pay $36 million for a 50% stake in Vijay Mallya’s sorghum beer business in South Africa.

A company affiliated to Mallya will hold the remaining stake, Diageo said in a statement.

In November, Diageo and Mallya’s United Spirits Ltd (USL) announced that the companies had signed a memorandum of understanding to form an equal joint venture for Mallya’s traditional sorghum beer business in South Africa. Sorghum, which can be used as a substitute for wheat, is used in animal feed and malted beverages, among other things.

The sorghum joint venture was part of a bigger deal under which Diageo agreed to pay $2.1 billion (around Rs.11,320 crore today), including the cost of purchasing shares held by the public, to buy 53.4% in USL, India’s biggest distiller. That deal has likely been delayed because of reservations expressed by Indian regulators about its structure and competitive issues.

The sorghum joint venture, which requires approval by regulators in South Africa, is expected to be completed in the first half of this year.